Rolls-Royce has increased its operating profit expectations for the full-year, following another period of "strong strategic delivery" in H1.

The FTSE 100 engineering firm recorded a 24.5% year-on-year increase in underlying revenue in the six months to 30 June, reaching almost £11.3bn, while its underlying pre-tax profit jumped by 47% to £2.49bn.

Furthermore, its operating profit also rose by 46% to £2.53bn, with cost efficiency actions continuing to deliver across the group.

The firm said that its strategic initiatives, including commercial optimisation and cost efficiency benefits, as well as an operational performance have led to a strong finance performance, which was delivered despite an external environment that remains challenging.

In this period, it has also returned £1.4bn of its planned £2.5bn share buyback, which forms part of its multi-year buyback programme totalling between £7bn and £9bn across 2026 to 2028.

CEO at Rolls-Royce, Tufan Erginbilgic, said the company’s transformation "continues to deliver", adding that it is now a "very different company to that of the past".

He stated: "We have unlocked new growth opportunities across the Group and created a resilient and diversified portfolio, with three strong businesses that can respond to changes in the external environment with agility and pace.

“We have made significant operational and strategic progress in the first half of the year. In civil aerospace, where we continued to improve our aftermarket profitability, we have also effectively eliminated aircraft on ground, providing a significant operational benefit to our customers.

“In defence, we continued to establish our leading position in autonomous propulsion with several key milestones achieved in the period. In power systems, we captured further profitable growth in data centres, including growing prime power demand. Following its recent win in Sweden, Rolls Royce SMR has now been successful in every competitive European nuclear tender and is uniquely positioned to become a global market leader.”

Following this update, Rolls-Royce has updated its underlying profit guidance from between £4bn and £4.2bn to between £4.7bn and £4.9bn. This is driven by higher long-term service agreement margins and an increased level of contract catch-ups in civil aerospace, strong profitability in power generation in power systems and stronger aftermarket profitability in defence.

It has also increased its free cash flow guidance from between £3.6bn and £3.8bn to between £3.8bn and £4bn in the full-year.

Shares in Rolls-Royce rose by almost 5% following the H1 update’s publication, marking a 20% increase since the start of 2026..

Head of investment at interactive investor, Victoria Scholar, said the engineering firm has seen a huge improvement in recent years.

She concluded: "It has benefitted from the backdrop of heightened geopolitical uncertainty and growing government defence budgets. Civil aerospace profitability has improved too. Rolls Royce has another growing string to its bow – it is becoming to some extent a picks-and-shovels AI infrastructure play as its power division benefits from data centre demand.

"Shareholders couldn’t have hoped for a better turnaround since the appointment of CEO Tufan Erginbilgic at the start of 2023. The stock has enjoyed a meteoric ascent and confidence in the company has skyrocketed. The company is returning cash to shareholders too through its share buyback announced in February. No longer a burning platform, Rolls-Royce is firing on all cylinders."

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